What is KYC and how does it apply to online casinos?

Know Your Customer (KYC) is a regulatory requirement which online businesses that deal with financial transactions are required to comply with. Online casinos, by the inherent nature of their business operations, process innumerable financial transactions each day and are thus required to comply with KYC regulations. If you’ve played at an online casino for long enough, you may have stumbled across the term ‘KYC’. In fact, even if not at an online casino, you may have come across KYC while banking, trading, selling or investing online.

The objective of KYC is to reduce the risk of illicit activities such as identity theft, money laundering and other financial crimes by verifying the identity, address, age, source of funds, etc. of every customer. Online casinos deal with huge volumes of money each day and given that the operators never actually see or interact with the players face to face, the risk of financial crimes being committed at online casino platforms is high. When the risk tolerance, source of funds and address of each player is known, the casino can conduct operations in a safer way for themselves and for their players. Effectively, KYC procedures are a part of the casinos overall anti-money laundering policy.

Here is a real-world analogy that can be used to understand KYC – let’s assume you want to apply for a credit card from a certain bank since it has great offers on online shopping which is something you often indulge in. During the application process, the bank will require you to produce certain documentary evidence as to who you are, where you get your money from and where you live. KYC or eKYC done at online casinos is effectively the same thing expect that it is done fully online without the need for your physical presence.

How do I complete KYC verification at an online casino?

Completing your KYC verification at an online casino usually involves submitting the required documents and then waiting to hear back from the verification team. The verification process is generally carried out once. Once your account is considered verified, all features are unlocked. Usually, verification is required before your first withdrawal request can be processed. However, a player can choose to complete the verification process right after registration. There is no need to wait until the first withdrawal. This, in fact, will avoid any delays in receiving your first cash out.

Some casinos may have an email address to which you can send an email with all the required documents attached. More commonly, casinos will offer a portal which is accessible after you login to your account. Here, you can upload and attach the required KYC documents and submit it for verification.

Documents are required in order to establish / prove the following – your identity, age, address, source of funds and proof of payment method. Proof of payment method generally applies to credit or debit cards only. While uploading copies of the front and back of your credit / debit card, you should block the middle digits of your card number and also your 3 – digit security code.

  • Documents accepted as ID proof – A government issued photo ID card such as a passport or a driver’s license will suffice (for South Africans, your national ID card will do)
  • Documents accepted as address proof – A municipal water and electricity account utility bill within the last three months (should be in your name), or a bank statement with your address on it, tax certificate, recent active lease or rental agreement, etc.
  • Source of funds – bank statements, salary payslips, dividends, trust deed, pension slips, director’s renumeration, sale of property, etc.

FAQs

I don’t have the necessary KYC documents, what can I do?

It is always better to read about the casinos KYC verification process in advance. Far too often players make the mistake of depositing money at an online casino even though they don’t have the necessary documents needed to complete KYC verification. In some cases, players can even lose the money they have deposited or any winnings they have made while playing at the casino.

If you find yourself in this situation, the best course of action would be to reach out the customer support and discuss your issue with them openly and honestly. If you don’t have a certain document, customer support may provide you with an alternative. For example, if you don’t have a driver’s license or passport to prove your identity, a birth certificate may be entertained.

Do South African online casinos require KYC documents?

Yes, it is mandatory for any online casino which offers real money casino games to carry out KYC verification in order to operate lawfully. Failure to comply with KYC verification may not only have negative consequences for the casino in terms of losses faced due to money laundering and identity theft, but casinos can also be fined. Gambling regulatory authorities are cracking down hard on online casinos in recent years. For example – the popular US sportsbook and fantasy sports app DraftKings was fined in 2020 for failing to stop players on self-exclusion lists from playing on their platform. South African casinos and sportsbooks are no exception can expect hefty fines for failure to comply.

I recently changed my address, but I had completed KYC at my online casino prior to this, is any further action necessary?

When you sign up at an online casino, it is imperative to read the casino’s user agreement, terms and conditions, and other fine print thoroughly and familiarize yourself with it. This seems very cumbersome and tedious, but it may just save you a lot of headaches at a later point in time. In the user agreement, some casinos will specify that it is you are obligated to inform them in case any of your registered details change – name change, address change, etc.

Even if this is not explicitly stated in the casino’s fine print, it would still be wise to talk to customer support and notify them about the change in order to avoid future problems with your account and money.

What are some common KYC mistakes casino players should avoid making?

One of the most common mistakes we see at online casinos with regards to KYC is made during the registration process. When registering as a member at an online casino, you will be required to complete a registration form that usually requests for personal details, contact details and account details. When it comes to details like name and address, it is vital to enter them correctly and ensure that what you are entering matches with your official documents. This way, when you later submit your documents for KYC verification, there is no mismatch which can result in the verification failing.

What if I have not completed my KYC? Can I still play?

The vast majority of online casinos will allow you to register for an account, deposit money and even play games for real money without having completed your KYC verification. However, when you wish to withdraw funds from your casino account, the casino will require you to complete KYC verification. A player can choose to complete KYC verification right after registering with a casino and we recommend doing this before you deposit money.

Lawrence
Lawrence Muller

Content Editor

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Lawrence is all in on the casino industry. His core market of focus is South Africa, but he has had significant exposure to international gambling markets. Areas ...continue reading

Fact-checked by: Thobani Mkhize